Parting Shots: Dearborn conference allows Severstal NA to shine

Severstal North America Inc. went all out at AMMs Galvanized and Coated Steel Conference in Dearborn, Mich., to showcase its unique position in the United States, with its modern electric-arc furnace (EF) in Columbus, Miss., and a totally rebuilt and modernized integrated plant in Dearborn.

Severstal NA chief executive officer Sergei Kuznetsov described the companys overall strategy in North America, which has emerged after acquiring and divesting many other assets as part of the entrance to this market. In many respects, Severstal NA is unique in its versatility. One of the outstanding papers was presented by Christopher Kristock, vice president of quality and product development at Severstal NA, who focused on the new 500,000-ton-per-year galvanizing line at Dearborn, which is still in the startup phase. The galvanizing line, toured by conference attendees on the second day of the event, was the star attraction. The line was designed to coat high-strength steel (HSS), advanced HSS and, in the future, ultra-high-strength steel. One of the more interesting features of the line is a gauge that senses and reports mechanical properties of the moving strip on a real-time basis. The new automotive steels require exceptionally tight control of the furnace atmosphere.

Severstal NA is an illustration of a company that has built galvanizing lines tailored to meet automotive customer requirements now and into the future. And they have staked the success of their total steel plant investment on the ability of these lines to meet the requirements of the most demanding customers.

A panel following the Severstal NA presentation showcased the views of two technical experts, Frank Goodwin of the International Zinc Association and Randall Brent of PPG Industrial Coatings, and two operating executives, Thomas Marchak, vice president of commercial at Severstal NA, and Jerry Richardson, general manager of CSN LLC.

Goodwin offered interesting insights into the challenge of making the desired final properties of steelin the galvanizing furnace, in the presence of necessary new alloying elementswithout jeopardizing coating quality. Brent described the multitude of non-zinc coatings that are employed over galvanized material and also over uncoated sheet. This is a field that is growing rapidly, particularly in architectural applications. Marchak devoted his presentation to the inevitable questioning of service, delivery, etc. He was understandably proud of the Severstal NA position.

Richardson gave a rundown on CSNs Brazilian parent, Cia. Siderúrgica Nacional, and spoke to the market served by his home operation in Terre Haute, Ind.

Participants came away from the two-day event with an enhanced respect for Severstal NA as a growing competitive force.

A comparison of earnings before interest, taxes, depreciation and amortization (Ebitda)/sales ratios for select steel companies puts OAO Severstal in the top global spot for the past year, followed by Gerdau SA and ArcelorMittal SA. Essar Steel Algoma Inc. leads in North America, followed by Gerdau and ArcelorMittal. As has been the case for several years, international iron ore suppliers lead in profitability, with BHP iron ore and Rio Tinto iron ore at the forefront, followed by Vale SA, BHP Billiton and Rio Tinto. BHP and Rio Tinto report results on a half-year basis rather than quarterly. Essar Steel Algoma and Severstal financial results for the first quarter of 2012 were not available at press time.

Thomas C. Graham is a founding member of T.C. Graham Associates. He is a former chairman and chief executive officer of AK Steel Corp., president and chief executive officer of Armco Steel Co. LP, chairman and chief executive officer of Washington Steel Co., president of the U.S. Steel Group of USX Corp. and president and chief executive officer of Jones & Laughlin Steel Co. His column appears monthly. He invites readers comments and can be contacted at tom.graham@tcgrahamassociates.com.

Have your say

All comments are subject to editorial review.
All fields are compulsory.